Hi, Chagris,
Great question. You are correct that if you are under 59.5 when you withdraw the funds from a traditional IRA or a 401K, you may be looking at a 10% penalty on that early withdrawal. This article gives you some of the reasons that may let you escape the penalty for a traditional IRA. 401K's have slightly different rules about avoiding the penalty and you can see those here.
While 401K trustees often withhold federal taxes for you from your retirement plan distribution at a 20% rate, know that percentage is not necessarily the amount the funds will be taxed to you. Your tax will depend on the tax bracket that income places you into (remember to subtract your legitimate deductions before determining your taxable income). In many cases you can request a different withholding amount.
Here is a link that gives you the tax brackets for 2023.
Since you are in Texas, you don't have to fret about state income taxes.
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Best,
Karen
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